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Wine Retailer to Buy Majority Stake in Japanese Bitcoin Exchange for $30M

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Madison Holdings Group Ltd. has agreed to buy 67.2 percent of Japanese cryptocurrency exchange Bitocean for 1.68 billion yen ($15.12 million). Inclusive of fees, the wines and alcoholic beverages company will pay a total $30.12 million. According to local media reports, the deal is to be completed through a subsidiary, Madison Labs.

Also read: Cryptocurrency Exchanges Delist Dozens of Struggling Altcoins

Acquisition to Diversify Operations and Expand Income Sources

Wine Retailer to Buy Majority Stake in Japanese Bitcoin Exchange for $30M

Madison is an investment holding company popular for selling top-end French wines. The $546 million-valued company is listed on the Hong Kong stock exchange’s Growth Enterprise Market (GEM), a junior segment of the bourse. The company also has interests in corporate finance activities, financial advisory services and asset management.

Bitocean is registered as a crypto exchange with Japan’s Financial Services Agency, but has not commenced trading yet. According to papers filed with GEM, sometime this month, Madison is buying the stake from “independent third parties,” in what management said was part of the company’s “diversification strategy.”

A report in the South China Morning Post (SCMP) also detailed plans by HDR Cadenza Management – a unit of HDR Global Trading, owners of crypto exchange Bitmex – to acquire a 51 percent stake in Madison Labs for $17.14 million. Both deals have yet to be closed. Raymond Ting Pang-wan, chairman of Madison, stated:

Our wine business is stable and profitable, but then it is small. It is hard to make wine trading into a very big business. This is why we have to diversify into financial technology and the cryptocurrency business – to achieve a better return for our shareholders. Virtual currencies and blockchain are getting more popular. Investing in the virtual currency sector will expand our income source.

Lured by Japan’s Robust Crypto Regulation

Pang-wan told SCMP that his company was not concerned about the current market slump, which has seen the price of bitcoin core (BTC) plummet by more than 80 percent from its December 2017 all-time-high of almost $20,000. “Bitcoin is cheap, which has created a good opportunity for us to enter the market. We are eyeing the long term, so we are not worried about short-term volatility,” he was quoted as saying.

Wine Retailer to Buy Majority Stake in Japanese Bitcoin Exchange for $30M

He said the decision to enter Japan, which controls about a fifth of the global cryptocurrency trading total, was motivated by the existence of a comprehensive regulatory framework in the Pacific island nation. “We wanted to invest in a platform that was under proper regulation,” said Pang-wan.

Japan is building one of the strongest regulatory frameworks for the cryptocurrency industry, ostensibly to prevent cases of theft of investor funds. The $530 million Coincheck hack in January marked a crucial turning point in crypto regulation in the country. Today, Japan has the Virtual Currency Exchange Association, a self-regulatory body, while exchanges applying for a license with the Financial Services Authority have to go through a rigorous verification process.

According to the SCMP report, Gary Cheung Wai-kwok, chairman of the Hong Kong Securities Association, said:  “This is a small investment for the company (Madison), so it will not take too big a risk. It makes sense for the company to diversify its business to achieve higher income.”

What do you think about Madison’s deals with Bitocean and Bitmex? Let us know in the comments section below.


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The post Wine Retailer to Buy Majority Stake in Japanese Bitcoin Exchange for $30M appeared first on Bitcoin News.

Crypto Bear Market Triggers Rise in M&A Activity

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In 2018 there was a rapid decline in initial coin offerings, a slowdown in blockchain business launches, and a bearish crypto market. During this period, companies with good liquidity have been scaling up and strengthening by acquiring startups. 

Also Read: Global Cryptocurrency M&As Rise

 M&A Deal Frenzy in 2018

In 2017 the number of cryptocurrency and blockchain companies that launched more than doubled compared to the year prior. The current bear market that has since come to characterize 2018 has proven the ideal time for institutional investors and venture capitalists to make a land grab and acquire innovative startups.  Crypto Bear Market Triggers Rise in M&A Activity

There’s been something of a deal frenzy involving cryptocurrency and blockchain-related companies seeing mergers and acquisitions (M&A), which have increased by 200 percent in 2018. M&A is the lifeblood of Wall Street and this activity is expected to continue to accelerate within the cryptosphere as we head into 2019. 

In an interview with news.Bitcoin.com, Danish Saxo Bank founder Lars Seier Christensen revealed that he is actively searching to acquire crypto businesses, saying: “I am also looking at a couple of serious fund vehicles that do extensive research across the space. Because of course there will be some gold nuggets that have been dragged down unfairly in this bear market as happens in all bear markets.” 

Crypto Bear Market Triggers Rise in M&A Activity
Lars Seier Christensen

According to JMP Securities’ head of blockchain and digital assets investment banking, Satya Bajpai, the industry is witnessing a “land grab” for innovative technology, access to new markets, intellectual property, and talented employees through M&A, reports CNBC

The most recent data from JMP Securities and data from Pitchbook shows 115 deals have already been announced globally this year, with roughly 30 more expected by the end of this year. This compares with just 47 mergers and acquisitions that were completed in all of 2017. 

Crypto Bear Market Triggers Rise in M&A Activity
Source: JMP Securities

Rundown of Key M&A Deals From 2018

There have been a number of key crypto and blockchain acquisitions this year, with one of the most active companies being Coinbase. The California-based exchange has not allowed diminished trade volumes to keep it from actively acquiring startups. Earlier this year, there were also rumors about a potential acquisition of Coinbase by Facebook, though this appears to have been little more than speculation. 

Crypto Bear Market Triggers Rise in M&A Activity

Coinbase acquired decentralized ERC20 trading platform Paradex. The company also acquired Earn.com for an estimated $100 million, a platform that lets users receive cryptocurrency for answering emails and completing tasks

Another notable acquisition involved Goldman Sachs startup Circle which acquired cryptocurrency exchange Poloniex.

Coinsource, a Texas-based cryptocurrency ATM operator, became the first digital asset ATM provider to be granted a Bitlicense in the state of New York.

Japanese insurance group Sompo Holdings acquired a 10 percent stake in Bitpesa, a Kenyan digital currency exchange and payments company.

Trade.io acquired British brokerage firm Primus Capital Markets for an undisclosed amount to offer BTC-backed Forex trading.

Consensys, the software company established by Ethereum co-founder Joseph Lubin, acquired struggling space startup Planetary Resources.

Japanese mega ecommerce and internet company Rakuten Inc. entered the crypto space by acquiring an existing crypto exchange to fast-track its wat into the Japanese cryptocurrency market.

Shapeshift completed the acquisition of Bitfract, a software firm which operates a service that allows users to swap from one cryptocurrency to many in an instant.

Ernst & Young, one of the major global accounting firms, acquired technology assets and related patents from Elevated Consciousness.

Blockchain research and development firm Nchain announced the acquisition of a majority stake in the Bitcoin Cash-centric startup Handcash.

Chinese bitcoin company BTCC was acquired by a Hong Kong-based investment fund.

It seems the market downturn that has pervaded through 2018 has been the ideal time for large corporations to snag a good deal and secure a stake in the future of the rapidly developing crypto space.

Will M&A activity continue to accelerate as we head into 2019? Let us know in the comments section below.


Images courtesy of Shutterstock.


Need to calculate your bitcoin holdings? Check our tools section.

The post Crypto Bear Market Triggers Rise in M&A Activity appeared first on Bitcoin News.